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Opinions expressed are solely my own and do not express the views or opinions of my employer.

Today I am in the Oracle Cloud World. I have high hope to learn their cloud strategy because Oracle is the only hugely successful company founded in the time of client/server movement that is still leaded by its founder. Today we are facing another significant change: Cloud and SaaS. It is very interesting to see how Oracle responses to it.

Mr. Mark Hurd, the CEO of Oracle, started the day with a great talk. He predicts that by 2025 80% production apps will be in the cloud, 100% of new development will be in the cloud, and virtually all enterprise data will be stored in the cloud. Great vision, full agreed.

The catch is that he also predicts that two suite providers will have 80% of the SaaS apps market. Of course, he thinks that Oracle will be one of them. It makes sense because ERP suites have highest-margin and giants like Oracle want to seize them. But this immediately reminders me the innovator’s dilemma and disruptive innovation.

The theory of disruptive innovation teaches us that companies pursue the “sustaining innovations” at the higher tiers of their markets because this is what has historically helped them succeed: by charging the highest prices to their most demanding and sophisticated customers at the top of the market, companies will achieve the greatest profitability.

On the other hand, most organizations eventually end up producing products or services that are actually too sophisticated, too expensive, and too complicated for many customers in their market.

I see the signs of both uncomfortable points in the conference. First, the trouble is that high-margin customers are typically older consumers. In the conference, I found that many attendee are old and wear suits. Yes, they are senior executives and decision makers. They decide buy or build, what to buy, etc. Oracle definitely wants to please who will bring revenue. But they are not future. When these fanboys retire, how will Oracle sustain the business growth? What I observed in a NoSQL provider conference (in NYC too) is totally different. There are a lot more attendees and I see many young faces and jeans. They are excited about the new technology and obsessed in building cool apps. They are developers and product managers, and the “inside sales” of that NoSQL database. Some day, they will be decision makers and buy what they love. Interestingly, most talks in Oracle Cloud World repeat the theme of cost reduction.

Second, organizations have muscle memory. Although Oracle quickly rebuilds their production apps into the cloud, I was not impressed when I saw the demo. They are not revolutionary. They look and feel like the old on-premise ERP apps: mega menus, book keeping, technology-oriented, etc.  The sales even explained to me that the data is organized like “folders” and “files”. You need that mindset to navigate the system to find what you want. Dude, who talks about folders and files on iPhone? Most ERP software started pre-internet, pre-search, pre-social, pre-mobile, and pre-cloud. Simply putting them in the cloud doesn’t solve the pain points. A mobile interface with same backend doesn’t help either. We need to change our mindset. All innovations in internet, search, social, and mobile are consumer oriented. If apps force users to think in their technical way (e.g. folders and files), UX will never be good.

I am facing similar challenges in my work. Life is struggle. The first thing we did was that we changed our mindset. We are not just mobile-first, DevOps in cloud, and organic social integration, we are human-first.

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